Silver Prices Plummet Amid Hawkish Fed Outlook and Geopolitical Tensions
The silver market has been experiencing significant pressure in recent times, with prices settling at $57.77 per troy ounce on Friday, a 2.51 percent drop from the previous day and marking an 18.58 percent decline year-to-date.
The current downturn can be attributed to several factors, including monetary policy expectations, geopolitical tensions, and shifting industrial demand profiles. The US rate outlook has been a major contributor to this pressure, with the dollar's rebound following softer inflation readings and the Federal Reserve's decision to hold rates steady.
Market participants now price in roughly a 65 percent probability of a Fed hike in September, with another increase anticipated by June 2027. This hawkish stance has resulted in a strengthened greenback, which has overshadowed supportive inputs.
Banks such as Commerzbank and UBS have revised their forecast estimates downward, with Commerzbank's Norman Liebke slashing the fair-value target from $70 to $57.50 and UBS penciling in $65 by September 2026, $70 by December, and $75 by spring 2027.